In the ad biz, you hear a ton about Hulu being hard to work with and pushing their weight around. As a consumer, I couldn't care less; I love the content, I love the interface, and the unique content deals are second to none. As an ad pro, it's about damn time people yank their dollars when negotiations go wrong with the giants and quick backing down (I'm hinting at some other big co's, fill in the blank....). Of course, my consumer and business opinion are intrinsically tied because I can't have the content without the advertising, but it's 6am and I don't have the energy to start a chicken and the egg argument.
via NYTIMES....
Unable to make the digital media dollars add up to their liking, Viacom will remove “The Daily Show with Jon Stewart,” “The Colbert Report” and other Comedy Central television shows from Hulu next week.
Although the companies said Tuesday evening that they were parting amicably, the decision represents the first major fracture between television show owners and the wildly popular video Web site.
Viacom’s decision is a serious loss for Hulu — this week “The Daily Show” is listed as the third most-watched TV show on the site — and it is a reminder that content owners can control just how much video — or how little — is placed online for all to view. At the moment, that spigot is being tightened, in part to protect the industry’s primary revenue stream, cable and satellite distribution.
However, the severing of ties with Hulu does not represent a strategic shift for Viacom. Comedy Central will continue to stream full episodes of the shows on TheDailyShow.com and ColbertNation.com, respectively.
Viacom’s Comedy Central channel reached a programming agreement with Hulu in mid-2008 that placed “The Daily Show,” “The Colbert Report” and a sampling of other shows on the service.
“In the past 21 months, we’ve had very strong results for both Hulu and Comedy Central, in terms of the views and revenue we’ve generated,” said Andy Forssell, senior vice president of content and distribution for Hulu, in a blog post Tuesday evening.
Mr. Forssell said that Hulu’s viewers had been “extremely vocal and passionate” about “The Daily Show” and “The Colbert Report.”
In a message that seemed written specifically for Comedy Central, he said that Hulu had “driven steadily increasing revenue per view” for the shows “as advertisers voted with their budgets to take advantage of innovative ad formats and very strong advertising effectiveness.”
“After a series of discussions with the team at Comedy Central, though, we ultimately were unable to secure the rights to extend these shows for a much longer period of time,” he said in the blog post.
Hulu said it was talking to Comedy Central about “a number of opportunities,” and said viewers should “stay tuned.”
TV episodes and individual films regularly rotate on and off of Hulu, in accordance with the site’s agreements with the content providers. The site’s candor is impressive; it explains the limits placed on each show, and episodes and clips are marked with icons that indicate their expiration dates. But the removal of entire shows is unusual, especially one as popular as “The Daily Show.”
The three-year-old Hulu dominates the burgeoning market for online TV viewing, with more than 44 million monthly visitors, according to ComScore. The site’s monthly video view totals have skyrocketed in recent months, from 580 million last September to 1.01 billion last December.
Three of the broadcast networks, ABC, NBC and Fox, own stakes in Hulu. Viacom’s decision may suggest that the economics of Hulu make less sense for content providers that lack equity in the Web site.
“We tried to reach a deal; we got close; we continued to talk even over the weekend. But we could not agree on a price,” said a person involved in the Viacom negotiations who requested anonymity because the process was conducted in private.
The companies declined to say what prices were discussed. Hulu’s deals with content owners revolve around an advertising revenue split; the owners typically receive 50 to 70 percent of the revenue, and Hulu keeps the rest, according to industry executives. Because “The Daily Show” and “The Colbert Report” are so popular on the service, Viacom may have insisted on an upfront payment as well, although representatives for the companies would not confirm this.
“There have certainly been instances where there was a premium paid for what you might call the ‘halo effect,’ ” the person involved in the negotiations said. In Hulu’s case, the “halo effect” would be the users who come for Mr. Stewart’s jokes and stay to watch other shows.
A Comedy Central spokesman declined to say whether the channel would strike a distribution deal with one of Hulu’s competitors.
In a statement, the channel said:
Comedy Central has made “The Daily Show with Jon Stewart” and “The Colbert Report” available to consumers through Hulu since June 2008. Although that agreement has concluded, full-length episodes of each show will remain available at TheDailyShow.com and ColbertNation.com, respectively.
Hulu was one of the many digital distribution partners we’ve worked with over the past few years to add new outlets for our valuable and powerful content and to help drive the businesses of our partners. We had a great experience with Hulu, and we hope to work with its team again in the future.
Hulu users who have added “The Daily Show” and “The Colbert Report” to their queue will be informed of their removal later today, a spokeswoman said.
